Business Intelligence (BI for short) is one of the most effective tools for ensuring a company’s success. Applied correctly, it directly impacts the strategic, operational, and tactical functions of a company. According to statistics, 90% of sales and marketing teams cite BI tools as crucial in getting their work done effectively.
There are many scientific and technical definitions of business intelligence but simply put, it is “the process of collecting, storing and analyzing data from a company’s business operations.” That data is translated into meaningful insights that can help drive profitable business actions. That process of business intelligence occurs through four methods.
Elements of Business Intelligence
- Data Mining – The process of sifting through data sets to find correlating patterns and abnormalities to help predict outcomes.
- Process Analysis – Reviewing company processes by breaking down the components to identify what works best, what is failing or not cost-effective, and how to improve productivity.
- Performance Benchmarking – Performance benchmarking is the process of comparing your company’s performance against your top competitors. For example, if your company sells athletic apparel, a benchmark would be NIKE.
- Descriptive Analytics – Descriptive analytics use statistical techniques to summarize a data set.
Business Intelligence vs. Business Analytics
A common misconception is that business intelligence and business analytics are interchangeable. While the two are related, it is not the same. Business analytics is a subset of business intelligence. More importantly, business intelligence focuses on the “what” and “how” of a company. Business analytics, however, focuses on the “why.” In other words, business intelligence explains how a company is performing, while business analytics tells why the company is performing as it is.
Benefits of Business Intelligence
The benefits of business intelligence are numerous and only succeed in making a company more efficient and productive. They are:
- Increased Organizational Efficiency – As a core component of business intelligence is process analysis, one of its most compelling benefits is that it helps improve efficiency. Business intelligence can help identify the areas within a company that works best and the areas that need improvement. That knowledge, if successfully applied, can improve the overall efficiency.
- Reduce Risk – Business intelligence helps companies make data-driven decisions, which helps reduce the risk of failure. Using data insights allows for a more strategic approach.
- Improved Customer Experience – Business intelligence can provide a company insight into its customers’ behaviors. That knowledge can help companies better improve the customers’ experience and increase customer loyalty.
- Improved Employee Engagement – A significant aspect of business intelligence is analyzing the internal structure of a company, which includes its employees. Business intelligence insights can help improve employee engagement and ultimately increase employee loyalty.
- Increased Competitive Advantage – Business intelligence can help a company improve its efficiency and productivity. That increased productivity can help companies gain an advantage against their competitors.
Leveraging Business Intelligence
Business Intelligence is most effective when successfully leveraged. And the end goal for all commercial businesses is sales. The following is how to leverage your company’s business intelligence to increase sales.
- Data-Driven Insights – Business Intelligence helps companies make data-driven strategic decisions, which increases the chance for success. Forbes reports that companies who adopt data-driven marketing are six times more likely to be profitable year-over-year. Data-driven insights help better target customers, improve the customer experience and satisfaction, choose the most effective campaign promotion channels, and more. With the best insights, companies can better identify their target audience, their pain points, and their position along the sales funnel. All of this will help a company craft optimized marketing campaigns. And optimized campaigns increase the opportunity for success.
- Personalization – Piggybacking off the above, data-driven insights about customer habits helps a company better personalize its customer messages. That increases the likelihood of successfully converting customers and increasing sales. Research shows that 91% of consumers are willing to shop with brands that provide offers and recommendations relevant to them.
- Real-Time Reporting – Many business intelligence tools provide accurate real-time reporting. Real-time reporting helps sales teams quickly adjust when necessary if a campaign or promotion is not working as they would like. Quick and timely responses can make a significant difference in the overall success or failure of a campaign.
- Increased Productivity – Business Intelligence helps companies understand the internal and external environment, including the steps necessary to improve internal company processes. That knowledge enables you to better streamline your company structure, which leads to greater efficiency and greater productivity. A more efficient and productive company has a far greater chance of successfully driving sales.
- Plan for the Future – Business intelligence tools allow you to identify trends within your organization, as well as the industry. That insight can help better forecast and plan future campaigns and promotions, ensuring success. It also helps you stay ahead of competitors and gain a competitive advantage.
Business Intelligence Tools
There are various systems and tools used for business intelligence. The following are the most common and essential types companies should consider.
- Dashboards – Dashboards help process and organize vast amounts of data into a simple, easy-to-understand format.
- Reporting – Turns data into complete performance reports that help companies identify what worked and what didn’t.
- Visualization – The human brain processes images a lot faster than it does text. Visualization tools transform data into visualized information.
- Predictive Analysis – While reporting delivers current performance information, predictive analysis tools help companies forecast and predict what could happen in the future based on certain elements and factors.
Business Intelligence has become a critical component of any successful business. It helps companies better understand both their internal and external environment, ensuring your decision-making is strategic and tactical for achieving the best results.
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